What the pilot allows
Shellharbour City Council opened its Mobile Tiny Homes Pilot Program on 7 September,
after the state planning department finalised the changes to the Shellharbour Local
Environmental Plan 2013 that the trial needs. The council's
release
calls it the first initiative of its kind in NSW local government
; we have not
checked that claim against other councils. On its
program page
the council puts the core of it in one line: Eligible mobile tiny homes may be approved
through Council's Mobile Tiny Homes Pilot Policy and Eligibility Criteria. without the need
for a development application, provided all pilot requirements are met.
Two pieces work together. A clause in the local plan makes a qualifying tiny home exempt
from needing a development application for use as a secondary dwelling, and a
Local
Approvals Policy, adopted on 22 June 2026, sets the criteria for the approval that
replaces it: a section 68 approval under the Local Government Act 1993, which, the policy
notes, allows a local approvals policy to grant permission to install a moveable
dwelling. The approval is for long-term renting. The policy says an approved home must
not be used for short term rental accommodation and will be governed under the Residential
Tenancies Act 2010
, so a tenant gets a tenancy agreement like any other renter.
What the pilot covers, and what it does not
In the pilot
- The home
- A campervan or caravan, meaning a moveable dwelling capable of registration as a motor vehicle or a trailer, on wheels
- How many
- One, on a lot with one existing house
- The use
- Long-term rental, under a residential tenancy agreement
- The approval
- Section 68, Local Government Act 1993, assessed against the policy
Not in the pilot
- Other home types
- Manufactured homes and relocatable homes
- Other uses
- Short-term rental accommodation; farm stays and agri-tourism
- Building on site
- Erecting a tiny home on the land, rather than installing one
The council gives its reason as rental supply. Its
fact sheet
puts Shellharbour's overall rental vacancy rate at 0.76 per cent against 1.17 per cent for
regional NSW, and says 32.7 per cent of rental listings were affordable to moderate income
households in the 2025 calendar year, down from 36.6 per cent in 2024. The fact sheet does
not name the source of those figures, or the date of the vacancy rates. On why only homes
on wheels qualify, it says: This wording is intentional to avoid larger types of homes
which are higher risk and warrant a DA assessment.
Will my block qualify?
The land has to pass every gate in the policy. It must be residential zoned land (R1 to R5), a Torrens title lot of at least 450 square metres with one existing dwelling house. It must not be flood prone, a heritage item or in a heritage conservation area, in a foreshore area or an environmentally sensitive area, or known to be contaminated, among other exclusions, and the tiny home and its access road must not be on land mapped as bushfire prone. The site must slope no more than 5 per cent, the home cannot sit over an easement, and there must be an existing all-weather access to get it in.
The home must connect to the site's existing sewer, stormwater and water. The policy
is plain on septic and similar systems: Connection
to an on-site sewer management system will not be accepted.
It must have a smoke alarm,
an engineer's certification, areas for sleeping, kitchen and living, bathroom and laundry,
and no more than two bedroom spaces. It must be anchored as the manufacturer advises
but must
be kept on wheels during the pilot period
, and it cannot be attached to the house
except for its service connections.
The largest trailer the pilot allows, on the smallest lot it allows
A 450 square metre lot drawn 30 metres deep and 15 metres wide, seen from above, with the street on the right. Lot shape and house are illustrative; the home's size and the setbacks are the policy's.
Bigger blocks need bigger setbacks. The house also keeps its required car parking and 20 square metres of private open space, the home stays 3 metres from the trunk of any protected tree, and there must be 1.2 metres of kerb for each extra bin. Covenants on the title still apply, except one that limits the number of dwellings where the council is the body that can release or vary it.
Side and rear setbacks by site area
| Site area | Side setback, at least | Rear setback, at least |
|---|---|---|
| 900 square metres or less | 0.9 m | 3 m |
| Between 900 and 1,500 square metres | 1.5 m | 5 m |
| 1,500 square metres or more | 2.5 m | 10 m |
The council's self-assessment checklist walks through each of these with the clause it comes from. None of the documents we read, as at 9 October, estimates how many Shellharbour lots would pass every gate.
The money, and the end of the trial
The policy waives infrastructure contributions for now: Mobile
Tiny Homes approved under this Policy will not be required to pay section 7.11
contributions during the trial period.
The fact sheet explains why: the homes are
permitted for two years only, so there will not be a permanent pressure on
infrastructure
. The council's
2026-27 fees and
charges list no fee for tiny homes by name; the general fee for Section
68 Applications not otherwise specified in Council's Fees and Charges
is $304.00. The
documents we read do not say which fee a tiny home application pays. Extra bins are charged
to the main house.
The end of the trial is where an owner carries the risk. Afterwards, the policy says,
If
the applicant wishes to continue using their Mobile Tiny Homes for rental accommodation, a
development application will be required.
The policy says the local plan gives a
90-day grace period after expiry to lodge for that approval or stop using the home as a
secondary dwelling, and that contributions are then levied through the development
application. It also notes that under a state regulation some uses need no council
approval, such as a caravan for temporary living arrangements or for members of the
owner's household. And the two years are not locked in: the policy says Council
reserves the right to review, vary or revoke this policy.
It is not guaranteed that a development application will result in approval for the Mobile Tiny Homes.
The pilot's path, and the dates still ahead
- September 2025Council endorses preparing the planning proposal.
- December 2025Planning proposal submitted.
- March 2026Gateway determination issued.
- April to May 2026Public exhibition.
- 22 June 2026Council adopts the Local Approvals Policy (resolution 86/2026).
- 7 September 2026The council announces the department has finalised the plan amendment, and opens the pilot.
- About one year inThe policy recommends a review.
- Within 18 monthsThe fact sheet says the council will consider whether to continue, change or cease the trial.
- Two yearsTrial ends; 90 days to lodge a development application or stop using the home as a secondary dwelling.
If the two years run from the September 2026 start, the trial would end around
September 2028 (our arithmetic). The council says successful approvals will be
registered on Council’s system, allowing for the trial to be monitored and
evaluated
.
Our read
This is opinion, built on the documents above. A council testing a cheaper rental option before it rezones anything is the right order of operations, and the fences are sensible ones: no flood or bushfire land, sewer only, a smoke alarm and an engineer's sign-off, proper tenancies rather than holiday lets. But the deal is lopsided in time. An owner buys a home on wheels, installs and connects it, and gets at most two years and 90 days of renting with no contributions, in a trial the council may change or end sooner. After that, renting on needs a development application, with contributions, that the council itself says may not be approved. Anyone running the numbers should run them on two years at best, not on the life of the home. The other unknown is scale: nothing published says how many lots clear every gate, so nobody can yet say whether this is a housing measure or a handful of approvals. The council registers every approval. When it reviews the trial, it should publish how many homes were approved and where, so residents can judge the result rather than the intention.
How we sourced this
We read the council's program page (last updated 25 September 2026) and its release of 7 September 2026, and the four documents linked from the page: the Local Approvals Policy, version 3 dated 7 September 2026, downloaded from the council's policy register; the self-assessment checklist; the fact sheet; and the council's 2026-27 fees and charges register. The policy register serves documents through its own search rather than a fixed link, so we link the register; search it for "tiny". We could not read the amended local environmental plan itself, because the NSW legislation website refuses our automated reads; the checklist cites a clause 6.17 and the fact sheet describes a Schedule 2 provision, and both say the plan's criteria are replicated in the policy, so we describe the rules from the policy. The fact sheet's rental figures are the council's, and it does not give their source. The lot drawing's proportions and house are ours; the 2028 end is our arithmetic. We have not contacted the council. The section headed Our read is opinion.
Sources
- Shellharbour City Council, Mobile Tiny Homes Pilot Program, last updated 25 September 2026, read 9 October 2026: what the pilot does, the development application exemption, servicing, and the linked documents.
- Shellharbour City Council, Tiny Homes Pilot Program now open in Shellharbour, media release, 7 September 2026, read 9 October 2026: the opening, the plan amendment finalised by the department, June 2026 adoption, and the council's "first" claim.
- Shellharbour City Council, Local Approvals Policy, Mobile Tiny Homes Pilot, Council Policy, version 3, 7 September 2026, adopted 22 June 2026 (resolution 86/2026), in the council's policy register, read 9 October 2026: scope, exclusions, every eligibility criterion and setback, the contributions waiver, the tenancy rule, the review, and the end of trial.
- Shellharbour City Council, Tiny Homes Pilot Program, Self-Assessment Checklist, read 9 October 2026: the criteria with their plan and policy clause references.
- Shellharbour City Council, Tiny Homes fact sheet, September 2026, read 9 October 2026: the rental figures, the timeline, why only homes on wheels, the contributions reasoning, the 18-month review and registration of approvals.
- Shellharbour City Council, Fees and Charges 2026/27, online register, read 9 October 2026: the general section 68 application fee and the absence of a tiny home fee by name.
Spotted an error, or read these documents differently? Tell us and we will check it against the documents and log the outcome here.